Giuseppe Grammatico: Welcome to the Franchise Freedom Podcast. I’m your host, Giuseppe Grammatico, your franchise guide, and today we have a very special guest. Today we have Lauren Dooley. Lauren is an attorney with Norvins, York & Jacobus in Toms River New Jersey. Lauren, welcome to the show.
Lauren Dooley: Thank you for having me. Good morning.
Giuseppe: Good morning. So very excited to have you on the show today. We’ve been talking, working together for the past few years and been wanting to have an attorney on the show. So very excited. So before we get started, Lauren, if you could just fill in the audience on a little bit of your background, you know, how you got started, or how you got into this business and what does that journey look like?
How Lauren Became a Business and Banking Attorney
Lauren: Absolutely. So I’ve been practicing law for approximately 15 years. I started, I went to Villanova University and I have a Bachelor of Arts in political science. And I then attended Seton Hall Law School. And after that, I decided to clerk for a judge in Ocean County. And while I was clerking I got to know a lot of different areas of the law and litigation. And specifically, business law, which led me to really where I am today.
I had a really strong interest in helping businesses and in banking. I come from a long line of bankers. I’m the first attorney in my family, but everyone was involved in banking. From my grandfather, who was president of a bank, my father was vice president of a bank and now does commercial loan brokering.
Through that, I have for many conversations, learned about businesses and how they work and financing businesses and helping businesses come from, you know, their start and up to closing businesses. When I started working at my current office about, approximately 10 years ago, this particular office is very well versed in banking law and business law and I just fell right into it. I had a series of clients that gave me some experience in business law and with some of the other partners in the office, just started practicing business law, and I really enjoy it.
Giuseppe: That’s great. And I’m sure there’s always a demand for that, with so many things going on to setting up of the business. So definitely a high demand. And that kind of leads us to, you know, whenever I speak with someone looking at investing in a business investing in a franchise, we always talk about a team, you know, putting a team in place.
And that team is essentially your financial advisor, obviously to look over your finances and investments, and as well as a banker. We take a look at your accountant as well as an attorney. So it’s kind of the four-member team to have to use as a resource to work together and preferably they all kind of speak together. Can you talk a little bit more about, you know, a small business owner that is looking to start their first business, the importance of an attorney, the role and, you know, what you can offer that person?
The Importance of Having a Team in Place
Lauren: I absolutely agree with you, I think a team is critically important, and specifically, a team that all functions together to really put your business in the first place. It is so critically important, especially to have an attorney to draft the correct business documents for you to form the entity and also to review your proposed entity. For example, if you’re going to form a franchise, to really work with the franchise to determine, you know, what is the best plan for you to review the franchise documents and to protect you.
That is what is critically important is what is your plan also for the business one year, five years, 10 years down the road? And having an attorney there to really guide you in the right direction, to really put you with the correct financial adviser or with the accountant informed. Do you want to form a limited liability company? And if you do form a limited liability company, how are they going to be taxed?
What are the legal implications of that? Would you rather form a partnership or a corporation? And these are questions that can really only be answered by an attorney, by an accountant and by a financial advisor so that they can put your goals together. Your goal may be to own the business for life. Or maybe it’s your goal to own the business for a year and then sell it. Or perhaps maybe you’re going to acquire a partner in a year. And how you set that up on day one really will guide you what’s going to happen in a year or five years.
Giuseppe: Right. And full disclosure, Lauren and I have worked together the past few years and she was actually referred by my financial advisor, was also referred to my account. And one important thing and one piece of advice that I would give to everyone listening in is it is nice to have that team in place where they can all communicate easily with each other.
So obviously everything kind of flows into one another and maybe a financial advisor speaking with Lauren, you know, the attorney or the, Lauren speaking with the accountants. So very important to get that team set up. You know, obviously, I went through referrals and it’s been a great experience and just much easier to communicate, get things done.
So I highly recommend that. I went to school, I went to grad school, they don’t talk about this stuff. I took an entrepreneur class. I’ve been a business owner of multiple businesses, and they don’t really teach you about things such as setting up the right legal entity, they tell you, you need one, but they don’t give much advice or even one thing that came up that I had never heard of was a successor plan. Can you talk a little bit more about a successor plan and why does someone even need that?
Why Estate Planning is Crucial
Lauren: Absolutely. Typically, a successor plan will also come into play if you are going to obtain financing from a bank because if something were to happen to you or you were to acquire a partner, the bank wants to know how are you going to pay that loan off? a successor plan can be part of a buy-sell agreement that is formed right when you start the business with a partner. Or it can be even set forth in your will as simple as this is who is going to acquire 100% or 50/50 ownership of my business.
And it is critical so that you know what will happen to this asset you have been building upon your death or upon the sale. So it’s something that you really need to have in mind right when you are forming the businesses. What is the next step, like I said, going one or five or 10 years down the road? And what is your plan for that? Some banks will require you as a keyman, you’re going to hear that often if you do obtain business financing, as a keyman to obtain life insurance so that if you cannot pay a loan off, there is life insurance in play.
Also, that would happen if you do acquire a partner. The partner would want you to have keyman insurance so that if something were to happen to you, how is the partner going to participate successfully in the business? You have your partner as the beneficiary of the life insurance policy. So, you know, we also, we’re talking about a team, that’s probably another person that would be crucial on a team as an insurance broker, somebody that can really guide you to a correct life insurance policy and to business insurance, depending on what type of business you are setting up.
Giuseppe: So it’s almost like you need a checklist because in our business and franchising, you know, you don’t know what you don’t know and you can’t ask certain questions if you don’t know to ask them or that they even exist. So it’s almost as if you’re a new business owner or thinking about business ownership. We need a checklist of things that people you need on your team, what you need set up and the question.
Or maybe you’re even taking a step further, your options. You need a legal entity and these are your options, you know, next step, you know, financial advisors you need someone to kind of take a look at everything, make sure you’re, you know, you have everything structured, whether it be a retirement account, non-retirement account and are fully diversified.
So I know coming from experience and being an investment major, a lot of stuff that just, it’s just not covered in school and you kind of have to learn it the hard way. So we try to speed things up in the process for everyone listening in and give them a head start before they even start their business.
So, you know, we were introduced originally, and this kind of, I believe, ties into the successor plan, but we were introduced through our financial advisor through, or from estate planning, right? There’s so many aspects and what’s in the estate, what happens if I pass away or my spouse? And I believe that also ties into the business. Can you just talk about the importance of estate planning and that it’s never too soon to start? It’s something that you know, at bare minimum, you should have at least a will in place.
Lauren: Absolutely. I drafted my first will when I was 25 years old, was newly married, had no children. But one thing that is important to have a will is that if you were to pass away, anyone that would have to administrate the estate, if you don’t appoint an executor in a will would have to have be bonded and have to pay for that bond. And it is a bit of a process so that by having a will and appointing an executor, and an executor is just somebody that is going to step into your shoes once you pass away to handle the settlement of your assets. Even something as simple as transferring title to a car, if you don’t own a home.
The executor allows, or the will allows the executor to do that without having to post a bond with the court. That’s in very simple terms. When it comes to a business, I have clients that divest their entire business assets within the wealth, especially if they do not want to leave it to their spouse and that they are divesting the interest of the business to business partners that are not related or to their children. I have clients that do it right in the will and the estate plan. If you do not do that, then they pass by just corporate law, whatever New Jersey law states in the membership agreement up in LLC, or in your corporate bylaws.
And the reason that is an issue is that you may set up that LLC or that corporation, and then pass away 20 years later and never take thought as to what those agreements say. So, the will is an updated agreement as to what is going on in your personal life and how you want those assets to pass. So it is critically important for everyone to have a last will and testament from day one in my opinion.
Giuseppe: Right. I cannot agree with you more. And that’s the advice I took and I definitely follow that advice. Never know what the future brings, right? Always have to be prepared.
Lauren: Always have to be prepared. Yes.
Giuseppe: Right. Because yes, I’ve heard horror stories, people not having wills in place. You know, father, mother passes away suddenly and children don’t know where the assets are. They don’t know what to do with the business. Is there a backup? Who is the successor? So, yeah makes, will make your life so much easier down the road
Lauren: One of the comments on that is when you do not have a will in place and you pass away unexpectedly, that is when a lawyer gets involved and it goes to court and it takes often years. And if it’s a valid estate expense, the payment for those legal costs come out of the estate. So what will happen is that all of the assets that you have spent years building in your business will be eaten away by the lawyers and all of the fees. So drafting a simple will which is not an expensive plan can really save your estate and your children and your business partners years of expensive and painful litigation.
Giuseppe: That’s good to know. I did not know that. And when do you recommend for everyone listening in, that you should be updating your estate planning? Either all your documents or at least the will. When is that? Is that every 10 years?
How Often Should You Update Your Estate Plan?
Lauren: Yes, I would say It should be every, I always say between five and 10 years. Typically the laws change approximately every 10 years. That seems to be what is happening in New Jersey and in the nation in every individual state. The laws typically change. Also, your will should change or be updated if you have an additional child or if you change your business in any way. You change the name of your business, you change the setup of your business, you require a partner, if you get divorced, if you get married. Any major life event that affects your life, is when you should reexamine your wealth.
Giuseppe: Okay, very good. That’s good to know. So that so we’ll see if, as you mentioned, five or 10 unless there’s a major change beforehand, then definitely contact your attorney, contact Lauren. One thing, just looking at the firm Norvins, York & Jacobus, one thing I liked is that obviously as an attorney, just I mean, this is just this goes for anyone, you can’t be an expert in every area.
So it is my understanding, I forget the total number of attorneys but you could have multiple attorneys in the office that practice or cover different, have different specialties, correct? That can cover different parts of the law. So what’s a major advantage? What’s the size of your firm?
Lauren: So we have six attorneys in our office. The six of us are partners. I have one partner, Michael Jacobus, who is a certified elder law attorney and he is an expert in estate planning. Michael York and Harvey York are experts in land use and in banking law. Harvey specifically has been practicing land use law for about 50 years. He is one of the foremost land use experts in the state. Melissa Willem in my office is an expert family law attorney and she handles all of the family law matters. And David York, like me, handles corporate law and land use law and he is focused up in our Bergen County Office which allows us to practice up there as well.
Giuseppe: So it’s essentially a one-stop-shop. When we talk about teams, this is truly an additional team in that is It’s not an area of expertise on your end, there is another attorney in the office that would be able to handle it.
Lauren: Absolutely. And what is also nice is I can just walk next door in the office next door and ask Mr. Jacobus about any elder law issue I have, which I have done before and it’s very beneficial.
Giuseppe: Okay, perfect. What would be so, you know, a large part of the audience of the podcast are corporate executives, you know, especially with what’s going on today with the pandemic, either they’ve been furloughed, they may have lost their jobs and a lot of people are contacting us. You know, I’ve been looking at business ownership. Not sure where to start and that’s kind of where we come into play. We like to work directly with everyone, figure out is business ownership the right fit.
And then we look at franchise and non-franchise types of businesses. What would be your number one piece of advice to that first time business owner, contacting you, so just say they’re contacting you for the first time, what would be your suggestion? Is that just a kind of a consultation reviewing everything, both personal assets, what they have set up? Is there kind of a checklist or something you have in the website? Or do you just recommend a phone call?
Finding the Right Plan for Your Unique Business Situation
Lauren: I always recommend a phone call. I cater to each client personally, every client is different. It depends on the type of business that they want to set up and what type of assets they have to contribute to the business. It depends on how many partners they have. It depends on the type of partners they have.
There are different products to help them finance the business that are available depending on the partners, depending on their, on financial ability. One thing that’s going to be really fantastic for new business owners over the next two years are small business administration loans. These there going to be extremely popular products. I believe the SBA will continue to fund, and this is separate and apart from the programs that people are hearing about regarding the CARES Act, but just the standard SBA loan. I close, you know, anywhere, a few of these every month and they always are great successes for my clients.
And they’re typically good for clients just starting out, or perhaps clients that were unsuccessful before and are starting a new business. They cater to minorities and to women and really anyone that is looking to start a business. So I would say open your eyes and look beyond conventional financing. Just because your bank down the street cannot offer you money, there are other ways to get financing for your business. And I think this is a great time to start a new business, a franchise specifically or any type of entrepreneurship. I think this is the time.
Giuseppe: Yes, I will agree there. And going back to funding, absolutely. There are so many options. When I started 15 years ago, I did not realize, I didn’t know you can use retirement assets, or maybe at the time you couldn’t, but you’re able to utilize retirement assets to start a business. I was not even aware of that. Without any penalty. Obviously, there’s a process you have to follow and you have to speak with a professional regarding that. But lots of options out there, don’t assume, get the help.
Take up Lauren on a consultation and I’m sure they can get some of their questions answered. But in the meantime, for everyone listening, just get everything in order, right? Figure out the business structure, what the business looks like, financials put together and as much of the information as possible, so just so that they’re better prepared to have a discussion with you. So Lauren, last couple things, I usually kind of end off with, or finish off with any other things that we didn’t cover that you’d like to mention to the audience?
Lauren: Yes, thank you. I think it’s important for new business owners or any business owner to realize the importance of having this team will save, while you will spend a little bit of money and time upfront, it will save you lots of headache and lots of legal fees down the road. Unfortunately, a lot of my practice is made up of corporations and members of corporations and LLCs who did not do the planning and I’m now in court with them. And it’s not only financially, you know, difficult, but it becomes very emotionally difficult and trying on you because often you’re trying to wrap up a business so you can start a new one, and it just takes a long time.
So I would highly recommend consulting with all the professionals we mentioned in the beginning. And on that note, as well use those people to expand your network. These are new people that are also involved in business and they are a wealth of information and perhaps connections to get you off your feet and create more business for you. So the more business professionals you associate with, the more business, the more successful your business can be.
Giuseppe: Great advice. That’s, for everyone listening in, definitely give a call out to Lauren. Lauren, actually two things. Someone that is interested that they want to learn a little bit more. How can they contact you? And the second part is, since this is, this podcast is essentially being broadcast across the country, could you help individuals outside of New Jersey?
Lauren: I can help people outside of New Jersey and if it is an issue that I specifically cannot help with, I do have a network of attorneys throughout the country.
Giuseppe: Okay, great. And how does someone reach out to you as far as if they have a question, want to start or take you up on that consultation? What’s the best way to reach you?
Lauren: Absolutely. They can reach me at 732-349-7100. That is my phone number at the office.
Giuseppe: Perfect. Well, Lauren, I really appreciate your time. This was very helpful. I wish I had spoken with an attorney when I started my journey. I’ve had to learn things the hard way because this is not, you know, these aren’t things that are taught to you. So I hope everyone listening in picked up some advice. Worst case, you have a brand new contact and you can gather some additional information based off your specific needs. Lauren, thanks again for joining us and have a great day.
Lauren: Thank you. You too.